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On Deadline blog: Peter Carpenter's mission: warn of employee-benefit 'time bomb'

Original post made by Jay Thorwaldson, editor emeritus, on Dec 20, 2011

Every week I get two or three e-mails from Peter Carpenter drumming in a single message: that retirement costs/benefits for public employees are threatening to bankrupt cities, counties, special districts and California itself -- maybe even America.

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Comments (13)

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Posted by Anon.
a resident of Crescent Park
on Dec 20, 2011 at 12:28 pm

I think this IS a huge question. The average benefits I have seen mostly seem reasonable, but there are some situations where opaqueness or politics has lavished money and benefits way past anything reasonable. You can walk up and down a spectrum of stories that will yank you one way or the other, but when you find abuses or even crimes, what is there to do. What is a fair answer to these questions? I have not heard anyone really explain and describe the problem in a factual way that does justice to the question. It is not fair to alter agreements to some that were negotiated and signed - nor is it fair for those that do not have such agreements that they get no security or benefits merely because they had no political leverage to rip-off the taxpayers. The whole issue can be seen in the rest of the economy as well and in the whole idea of compensation and benefits.

It seems like most of the answers to our current problems are so complex and intractable that we just settle for dumping the injustice and problems on to the weakest groups and people. I am not impressed by this kind of practice in our country and state that claims so much superiority over the rest of the world.

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Posted by Craig Laughton
a resident of College Terrace
on Dec 20, 2011 at 3:16 pm


This seems like good opportunity to invite Stephen Levy to respond to Peter Carpenter's concerns. I am not an economist, but it seems to me that a combination of bailouts and inflation will be how we muddle through this issue, like it or not.

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Posted by Resident
a resident of Community Center
on Dec 21, 2011 at 1:23 pm

I am not surprised, but I am disappointed in the lack of responses to Jay's article. I also want to thank Peter for his efforts to bring this issue to the public's attention. It is part of a larger issue in this country (and the world) where folks are unwilling to fund expenses so they go in to debt. On some levels the problem is more obvious (the national debt), although the solutions do not seem likely to be acted upon. The unfunded public employee pension benefit is even more of a challenge because it is not on most folks radar. They are more concerned with their daily lives and providing for their families. Most aren't financially sophisticated enough to understand unfunded liabilities and the level of future expense outflows that are being accumulated. The ones who do understand the issue are the public employee unions and the politicians. But rather than address the issue, the unions fund the election of politicians who continue to grant unsustainable pensions. I'm not sure the problem will be resolved unless a group of individuals with private contributions is able to put an initiative on the ballot to address the problems. I would recommend the following:
1.) all budgets need to be balanced every year, including the present value of all future payments that have already been committed to
2.) all public employees pensions should be converted to defined contribution (no more defined benefit)
3.) all public employees (including safety workers) should have not begin to receive pension payouts until they turn 65. They can stop work earlier, or take a new job if they are no longer able to do their existing job, but the payouts shouldn't start until 65.
4.) Eliminate all the issues with double dipping

I could go on but I'm not sure it is a productive use of my time. I basically to get out a few key points.

It is so disappointiong that this issue does not get more attention.

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Posted by Walter_E_Wallis
a resident of Midtown
on Dec 21, 2011 at 5:55 pm

Walter_E_Wallis is a registered user.

And how about variable pensions? Everybody else has to take the blows.

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Posted by Carroll Harrington
a resident of Community Center
on Dec 21, 2011 at 6:38 pm

I think this is one of the most serious problems in the United States today. Peter, thanks for your unrelenting attention, to put it mildly, to this issue.

Like this comment
Posted by pat
a resident of Midtown
on Dec 21, 2011 at 9:46 pm

From Los Altos Town Crier, 12/21: Resident’s watchdog group plunges into pension debate
Web Link

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Posted by Perspective
a resident of Meadow Park
on Dec 22, 2011 at 7:53 am

Wow...I am quite impressed by both Peter Carpenter and Jay Thorwaldson's reporting/writing on Carpenter and his points.

BTW, of course we always like what we agree with, and I completely agree with Carpenter on unfunded pensions breaking us. We can't ( or at least we can try to "can't") break our promises already foolishly made to those already retired, or perhaps even within a couple years of retirement..but there is truly no reason to not delay retirement by age, ( add a year of work before retirment for every year less than 50 or something similar to raise the age of retirement to be more in line with private sector in their 60s), and to not "tier" retirement based on new hire vs already hireds. ( new hires retire later, get less...)

There are a lot of intelligent solutions to prevent the dam from breaking...let's listen to Carpenter.

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Posted by Public-Sector-Pensions-Will-Bankrupt-America
a resident of Another Palo Alto neighborhood
on Dec 22, 2011 at 1:14 pm

Carpenter is only one of many people trying to get this message out:

The best place to get a recap of the daily news on "pensions" is:


People are sort of getting the message, but the numbers are so big, that it's hard to find very many people who understand the reality of the issues, or the costs that society is looking at to pay off these obligations.

No one on the Palo Alto City Council seems to understand, at least as one can sense by the dearth of public communications about Palo Alto pension obligations to the public.

Like this comment
Posted by William
a resident of Old Palo Alto
on Dec 23, 2011 at 3:13 am

Every firefighter and police officer that you see in this city will retire in their 50's, with a six figure yearly salary and full medical for the rest of their life! And we taxpayers will be paying for it.

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Posted by chris
a resident of Community Center
on Dec 23, 2011 at 8:08 am

A $100,000/yr pension is equivalent to about $2.5 million or more if paid in a lump sum. Think of that, be a firefighter and become a millionaire! In five years or less, state and city money spent in this area will severely crowd out spending in other important areas like education and healthcare. We need to make some hard choices now before it becomes too late.

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Posted by Resident
a resident of Another Palo Alto neighborhood
on Dec 23, 2011 at 9:13 am

It is about time....... Thank you for starting and hopefully more will take note.

Like this comment
Posted by What a Joke
a resident of Downtown North
on Dec 23, 2011 at 1:18 pm

He voted for it and now wants to complain about it and the fact that no one today will fix his mistake.

He should be embarrassed and go crawl under a rock.

Like this comment
Posted by Peter Carpenter
a resident of Atherton
on Dec 24, 2011 at 9:40 am

What a joke to think that ignorance and denial are better than experience.

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